Antitrust Authority director general Ronit Kan today implied that she will not approve the merger of IDB Holding Corp. Ltd. (TASE:IDBH) unit Nesher Cement Enterprises Ltd. with Hanson Israel Ltd. She made the comment at a meeting of the Knesset Finance Committee, which was discussing the merger.
Kan also slammed a decision to impose quotas on carton importers, which will increase the power of another unit of IDB, controlled by chairman and CEO Nochi Dankner, Hadera Paper Ltd. (AMEX: AIP; TASE: AIP), which is a monopoly in the industry. She said that the quota was a barrier to imports and therebt protected Hadera Paper.
Drawing an analogy to Israel's cement industry, it can be seen that Kan has strong reservations against restricting imports in order to protect a domestic monopoly. She said, "The fact that protection has been granted to Hadera Paper, a monopoly, enables it to take over additional markets and drive competitors from the market. We consider imports as a competitive interest. The implication is not a blow to domestic jobs, but the protection of private manufacturers, since a monopoly can raise prices without any competitive restraint, hurting local competitors."
MK Shelly Yacimovich (Labor) said, "Nochi Dankner is the strongest man in the economy, stronger than any politician, and this domination worries me. Nochi Dankner's control of the Israeli economy definitely worries me, it is too much, and it is dangerous and it spreads to control of communications and control of advertising. This worries me, but there is no need to fight it by hurting local industry and jobs."
Yacimovich added that a monopoly was not necessary a bad thing, and that competition did not necessarily lead to lower prices. She said that her heart was not with the cement importers, and that she viewed favorably any measure that would protect local industry.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2009
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